I INTRODUCTION

Under the new mandatory notification and suspensory regime, in effect from January 2026, acquisitions that exceed certain monetary or control thresholds cannot proceed without the ACCC’s approval. Unauthorised acquisitions are legally void and may incur substantial penalties. This reform unequivocally establishes merger control as an administrative process, giving first instance decision-making authority to the ACCC. Any appeals of its decisions are subject to a limited merits review by the Australian Competition Tribunal. Consequently, the FCA’s role is now limited only to judicial review of the Tribunal’s decisions.[1]

II THE NEW MERGER REGIME

A.    NEW THRESHOLDS AND TESTS FOR MERGER ASSESSMENT

To avoid the risk of anti-competitive acquisitions escaping the ACCC’s radar, the reform intends to capture a larger proportion of transactions by establishing new ‘control’ and ‘monetary’ thresholds. Notification is now mandatory if an acquiror gains ‘control’ of the target business. ‘Control’ refers to the capacity to determine the outcome of decisions regarding the target’s financial and operating policies, or the transaction crosses key voting power levels (>20% or ≥50%), depending on whether the target is a private, public, or already-controlled entity.[2]

The Act also establishes monetary thresholds that mandate the notification of share or asset acquisitions, if the acquisition results in ‘large or larger corporate groups’ or if the acquirer is a ‘very large corporate group’.

For example, an acquisition results in a ‘large or larger corporate group’ if the combined Australian turnover of both parties is at least A$200 million and:

1. the target’s Australian revenue is ≥A$50 million, or

2. the transaction value is ≥A$250 million, or

3. the cumulative revenue from the target and any similar acquisitions in the past three years is ≥A$50 million.

Similar monetary thresholds determine acquisitions by ‘very large corporate groups’. The reform also addresses the issue of anti-competitive serial acquisitions through the inclusion of the new “cumulative Australian revenue” limb, which aggregates a target’s revenue with that of previous targets acquired over the last three years in the same industry.

The ACCC will use two legal tests to assess notified transactions. First, it will assess whether the transaction ‘substantially lessens competition’ (SLS), referring not to a large or weighty lessening of competition, but one that is ‘real or of substance’ and thus meaningful to the competitive process.[3] This test is the same as before the reform, with one significant addition. It now encompasses the ‘creating, strengthening or entrenching of a substantial degree of market power’, in addition to ‘preventing or hindering competition’. The ACCC will also consider the cumulative effect of similar acquisitions by the merging parties in the three years prior to the notification. These additions strengthen the test by capturing a broader category of transactions and reflect a developing understanding of how some firms reduce market competition, such as through serial acquisitions.

Second, if a transaction does not satisfy the SLS assessment, the ACCC will consider, upon application, whether it would or be likely to result in a ‘net public benefit’. Although the ACCC will retain broad discretion as to what constitutes a public benefit, it will consider the object of the Competition and Consumer Act (CCA) and ‘all relevant matters’ including consumer interests.

In addition to the legal tests, the ACCC will use analytical frameworks and tools to assess the impact of a transaction on consumers, industry dynamics and the market competition over the immediate, short and long-term.

B.    COMPARISON WITH GLOBAL STANDARDS

Prior to reform, Australia’s voluntary notification regime placed it among a small minority of developed jurisdictions, including the United Kingdom, Singapore and New Zealand. The 2024 reform marks a significant structural shift, aligning Australia closer to the prevailing international model of mandatory notification. The United States has operated such a regime since 1978, requiring mandatory notification and clearance for certain transactions. However, unlike Australia’s new administrative model, the US enforces this through a court-centric approach: potentially anti-competitive mergers are challenged through federal court injunctions initiated by the Department of Justice and the Federal Trade Commission rather than prohibited by administrative decision.[4]

In comparative terms, the reform reflects a hybrid approach. It adopts the certainty and upfront scrutiny of the US’s notification model, while retaining the UK’s consolidated administrative decision-making structure. This seeks to enhance the effectiveness of merger control and protect competition, while simultaneously promoting business and judicial interests by streamlining the approval process and reducing reliance on costly and lengthy litigation.

III NAVIGATING THE SHIFT

A.    POTENTIAL IMPACT ON STAKEHOLDERS

The new merger reform will mainly affect the ACCC as it will be directly responsible for overseeing the approvals process and ensuring the effectiveness of the new regulatory framework. While the reform is likely to benefit the judiciary and consumers the most through increased efficiency, transparency and protection, it may also impose greater compliance and monetary burden on businesses and their legal teams.

1. Judiciary

The shift from judicial to administrative decision-making and consequent narrowing of the FCA’s jurisdiction would reduce burden on the judicial system for merger control and enforcement. However, the absence of a judicial body in the approvals process risks administrative bias influencing the outcome of commercial transactions.

2. Consumers

As was the intention behind the reform, the consumers are likely to benefit the most. Jim Chalmers, the Treasurer, highlighted that the last major reform occurred decades ago under Trade Practice Act 1974 (Cth).[5] Coupled with the long-standing dominance of a few giant firms and a lack of new competitors in recent years, this dynamic has become a significant cause of concern.[6] This reform addresses that concern by encouraging authentic competition in the market, which would achieve three goals: lower prices, higher quality of goods and services, and stronger markets. Furthermore, the implementation of a publicly available ‘acquisition register’ seeks to increase transparency and ensure accountability through public oversight.

3. Lawyers

M&A lawyers are likely to face significantly increased workloads due to expanded due diligence requirements and stricter regulatory compliance. Given the ACCC’s new suspensory power, transactions could take longer to close than intended. While this may increase firms’ revenue through increased billable hours, it will also prolong the time and effort required for individual deals. Furthermore, lawyers will need to rigorously mitigate regulatory risk as its enforcement is expected to increase and even inadvertent breaches could halt a transaction or trigger penalties.[7]

4. Businesses

Although the reform seeks to improve clarity for businesses by consolidating approvals within a single regulatory framework, it would likely increase the cost and complexity of transactions. Mandatory application fees, longer waiting periods, higher compliance costs and reduced confidentiality through the public acquisition register may create friction for merging parties. Businesses will also face intensified regulatory scrutiny, with non-compliance exposing them to significant legal and financial risk. The increased administrative burden and potential delays could deter some foreign investors, potentially affecting Australia’s attractiveness for international capital. Over time, however, the regime may foster a more predictable environment where regulatory compliance becomes a routine component of transaction planning.

B. IS THIS REFORM BETTER OR WORSE?

Assessing whether the reform is an improvement, requires asking a simpler question:

Does it advance the fundamental goal of competition law i.e. protecting consumers from arbitrary price increases and declining quality caused by concentrated market power, while allowing transactions that deliver genuine economic benefits?

Since the regulations only commenced in January, their long-term effects on Australian markets are yet to emerge. However, the initial outlook suggests that heightened scrutiny under the new regime is a progressive step towards restricting unjustified price hikes. While inflationary pressure increases prices to a certain extent, the reform seeks to moderate increases that lack a clear economic justification. Furthermore, the reform expects to encourage competition and drive quality improvements among established firms. Theoretically, this should improve market conditions and advance the reform’s fundamental goals in the coming years. 

IV CONCLUSION

Ultimately, the success of the reform will depend on how it is applied in practice. If it is administered properly, it could strike a positive balance between commercial freedom and a competitive, thriving market. However, until we can see definitive impact, the reform should be viewed less as a settled solution to Australia’s competition problems and more as an evolving experiment in modernising the nation’s competition framework.

V REFERENCES

[1]Australian Treasury, Merger Reform: A Faster, Stronger and Simpler System for a More Competitive Economy Treasury.gov.au (PDF, 10 April 2024) <https://treasury.gov.au/sites/default/files/2024-05/p2024-518262-merger-reforms-paper.pdf>.

[2] Allens, 'Merger Reform Legislation: Complex Process Risks Capturing More Transactions Than Intended' Insights (Web Page, 11 October 2024)<https://www.allens.com.au/insights-news/insights/2024/10/merger-reform-legislation-complex-process-risks-capturing-more-transactions-than-intended/>.

[3] Australian Competition and Consumer Commission, Merger Control Regime: Assessment Guidelines ACCC (PDF, June 2025) <https://www.accc.gov.au/system/files/merger-control-regime-assessment-guidelines.pdf>.

[4] ICLG, 'Merger Control Laws and Regulations: USA' ICLG (Web Page, 10 December 2025) <https://iclg.com/practice-areas/merger-control-laws-and-regulations/usa>.

[5] Jim Chalmers, 'Nation’s productivity, growth demands fairness in merger process', The Australian (Web Page, 20 November 2023), <https://www.theaustralian.com.au/commentary/nations-productivity-growth-demands-fairness-in-merger-process/news-story/20c13760e6d6bd953ce965e8a70b8def>.

[6] Ibid.

[7] Kirsten Webb et al, 'Merger reform broadens the risk of gun jumping', Clayton Utz (Web Page, 19 March 2025) <https://www.claytonutz.com/insights/2025/march/merger-reform-broadens-the-risk-of-gun-jumping#:~:text=Potential%20penalties%20for%20contravention%20of%20the%20standstill,*%20For%20corporations%2C%2030%25%20of%20annual%20turnover>.